Peru’s new government

Mining and the man

A calm start for Humala

AFTER narrowly winning a divisive presidential election, Ollanta Humala has got off to an unexpectedly calm start as Peru's president. A former army officer without any government experience, he has moved quickly to implement some of his campaign promises: his government has negotiated a new tax on mining companies and pushed through a law requiring that local communities be consulted before mining and oil and gas projects can go ahead. But Mr Humala and his prime minister, Salomón Lerner, have also stressed that they will stick to responsible economic policies and that change will be gradual. That has disarmed some of their opponents—for the moment at least.

Mr Lerner, a businessman, told Peru's new Congress last month that he had struck an agreement with mining companies under which they will pay an additional tax on profits totalling around $1 billion a year over the next five years. The details have not yet been spelt out. But negotiators have said that some of the money will go into a fund that mining companies can spend on projects in the communities where they operate. There will also be changes to the way that royalties are charged.

Mr Lerner said that the new tax will not jeopardise planned investment of $30 billion over the next five years. Mining companies, which include many multinationals, expressed relief that the tax was not heavier, and said that Peru would remain competitive with Chile as an investment destination. But since the new tax replaces a more or less voluntary contribution paid to local governments, implementation of the change may throw up problems.

So may the new law requiring prior consultation with indigenous communities over extractive projects on their land. Long debated, this measure will bring Peru into line with the International Labour Organisation's convention on indigenous peoples, which the country ratified in 1993. The government hopes the law will reduce the number of social conflicts involving mining and hydrocarbons.

Bizarrely, officials say that consultations will be organised by the culture ministry, which Mr Humala has entrusted to a singer. They will not be binding. The risk is that the whole process raises expectations that are not met, says Cynthia Sanborn, a political scientist at Lima's Pacífico University. Environmental lawyers say the new law will only work if the government sets out clear guidelines on who will be consulted about what.

Mr Humala also says he will personally lead efforts to cut crime and improve security, matters of widespread public concern. But his critics worry that to do so he is relying too much on his army friends. The government swiftly got itself into a muddle over drugs policy. An official announced that it would halt eradication of coca (the raw material for cocaine), which is increasingly being cultivated, only for Mr Humala to countermand him days later.

While the previous president, Alan García, hogged the headlines, constantly presenting plans and inaugurating public works, Mr Humala has closeted himself in the presidential palace, issuing occasional Tweets. That suggests a man who is learning on the job.